Green Bancorp, Inc. (NASDAQ:GNBC) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 05:00 pm ET

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Green Bancorp, Inc. (NASDAQ:GNBC) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, and welcome to the Green Bancorp's First Quarter 2018 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Terry Earley, Chief Financial Officer of Green Bancorp and the bank. Please go ahead, sir.

Executive
Terry Earley

Thank you, operator, and good afternoon, everyone. We appreciate your participation in our first quarter 2018 earnings call. With me today are Manny Mehos, Chairman of the Board and Chief Executive Officer of the company; Geoff Greenwade, President of the company and Chief Executive Officer of the bank; and Donald Perschbacher, Corporate Chief Credit Officer of the company and the bank. As a reminder, a replay of this call will be available through 11:59 PM Eastern Time on May 3, 2018. A slide deck to complement our discussion is available on our website at investors.greenbank.com.

Before we begin, I want to remind you that many of our remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Please refer to Slide 3 of our earnings slide deck as well as our first quarter 2018 earnings press release and our other public filings, including the risk factors in our 10-K, where you will find factors that could cause actual results to differ materially from these forward-looking statements. Now, I'll turn the call over to Manny.

Executive
Manny Mehos

Thank you, Terry, and good afternoon, everyone. We appreciate your time and attention today. Turning to Slide 4, we reported net income of $9.4 million $0.25 per diluted common share for the first quarter of 2018 and improvement from the fourth quarter of 2017 where we reported net income of $2.6 million or $0.07 per diluted common share. Adjusted for the cost of our secondary offering in February, in addition to the elevated provision expense related to our healthcare credit that moved to nonaccrual, our net income would have been $14.3 million or $0.38 a share.

Skipping to Slide 6, pretax, pre-provision operating earnings for the first quarter came in at $21.7 million up 8% annualized from the $21.3 million that we reported in the fourth quarter of 2017, which demonstrates the core earnings power of the bank. Pretax, pre-provision operating return on average assets was 2.1% annualized and represents our fourth consecutive quarter above 2%. A significant highlight of the first quarter was the benefit that we continue to receive from our decision to maintain a highly asset sensitive balance sheet as our net interest margin increased 23 basis points following the December rate increase by the fed. We expect that we will continue to benefit as rates move higher, which gives us confidence in our ability to achieve our full year outlook.

We also delivered another quarter of strong core deposit